PDF Correspondent VA and VA IRRRL Products - Choice Lending

Correspondent VA and VA IRRRL Products

Topic

Program Description

Product Guideline

This is base VA mortgage parameters for primary residence only. The borrower must be a veteran with eligibility documented with a Certificate of Eligibility, which indicates the Veteran's Entitlement. These products adhere to the automated underwriting systems "Loan Prospector" and "Desktop Underwriter" along with overlays that are created to the secondary market. Do not run AUS on the VA IRRRL product

Products

VA 30 yr fixed, 25 yr fixed, 20 yr fixed, 15 yr fixed, and 10 yr fixed VA 5/1 arm

AUS method

These products adhere to the automated underwriting systems "Loan Prospector" and "Desktop Underwriter" along with overlays that are created to the secondary market. Loans must have a result of DU "Approve/Eligible" or LP "Accept" Manual underwrite is permitted on the loans receiving a "Refer/Eligible" status ? refer to the manual underwriting guide

Program Codes

VA51T10, and VA51TJ10 VF3010, VF2510, VF2010, VF1510, VF1010, and VF30HP10 (High Priced), VF30IR10, VF30IRHP10 (High Priced),VF25IR10, VF20IR10, VF15IR10, VF10IR10, VF30J10, VF25J10, VF20J10, VF15J10, VF10J10, VF30JIR10, VF25JIR10, VF20JIR10, VF15JIR10, and VF10JIR10 Manual Underwrite: VF30MU10, VF30JMU10, VF30MUHP10, VF15MU10, and VA51TMU10

Eligible States

All continental states, Alaska, and Hawaii Geographic restrictions are listed under property types

Maximum Conforming Loan Amounts (This is inclusive of Funding fee)

1-Unit: 2-Unit: 3 Unit: 4 Units:

Continental U.S 417,000 533,850 645,300 801,950

1-Unit: 2-Unit: 3 Unit 4 Units:

Alaska and Hawaii 625,500 800,775 967,950 1,202,925

VA Guaranty must cover at least 25% of the total loan amount

1-Unit includes Condos and PUDs

1-Unit includes Condos and PUDs

VA Loan Limits by geographic region can be located at: Current VA Loan Limits

VA Loan Limits by geographic region can be located at: Current VA Loan Limits

Greater than $650,000 requires management review Greater than $650,000 requires management review

Maximum Jumbo Loan Amounts (This is inclusive of Funding fee)

1-Unit: 2-Unit: 3 Unit: 4 Units:

Continental U.S 625,500 800,775 967,950 1,202,925

1-Unit: 2-Unit: 3 Unit 4 Units:

Alaska and Hawaii 938,250 1,201,150 1,451,925 1,804,375

1-Unit includes Condos and PUDs

1-Unit includes Condos and PUDs

VA Loan Limits by geographic region can be located at: Current VA Loan Limits

VA Loan Limits by geographic region can be located at: Current VA Loan Limits

Greater than $650,000 requires management review Greater than $650,000 requires management review

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Maximum Fixed LTV/CLTV Standard and Jumbo loan amounts

Texas Equity 50 (a) (6) is not available

Primary Purchase 1-4 Units: 100/100%

Rate and Term Refi* N/A

Second Home Purchase N/A

Rate and Term Refi* N/A

Investment/Non-Owner Purchase N/A

Rate and Term Refi* N/A

Cash Out Refi

Cash Out Refi

Cash Out Refi

Maximum ARM LTV/CLTV Standard loan amounts only

Texas Equity 50 (a) (6) is not available

1-4 Units: 100%/125% ______________________

Primary Purchase

1-4 Units: 100/100%

Rate and Term Refi*

N/A

N/A ____________________ ___

Second Home Purchase

N/A

Rate and Term Refi*

N/A

N/A _______________________

Investment/Non-Owner Purchase

N/A

Rate and Term Refi*

N/A

Cash Out Refi

Cash Out Refi

Cash Out Refi

1-4 Units: 90/90%

N/A

N/A

Refinance Note Funding Fee

*Veteran has a conventional loan and is refinancing to a VA loan ? no cash in hand 90.01 ? 100% - no cash in hand ? debt consolidation only Veteran is required to pay the VA Funding Fee and it can be included in the loan amount

Loan Type Purchase Loan - Zero Down*

Purchase Loan - 5% Down Purchase Loan - 10% Down

Funding Fee 2.15% 1.50% 1.25%

Reservist Funding Fee 2.40% 1.75% 1.50%

Cash-Out Refinance Loan*

IRRRL *Re ? use ? 3.3%

2.15% .50%

2.40% .50%

The following persons are exempt from paying the funding fee: Veterans receiving VA compensation for service-connected disabilities. Veterans who would be entitled to receive compensation for service-connected disabilities if they did not receive retirement pay. Veterans who are rated by VA as eligible to receive compensation as a result of pre-discharge disability examination and rating or on the basis of a pre-discharge review of existing medical evidence (including service medical and treatment records) that results in issuance of a memorandum rating. Veterans entitled to receive compensation, but who are not presently in receipt because they are on active duty.

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Surviving spouses of veterans who died in service or from service connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).

Verification of exempt status must be obtained by one of the following:

a properly completed and signed VA Form 26-8937, Verification of VA Benefits, indicating the borrower's exempt status,

for a veteran who elected service retirement pay instead of VA compensation, a copy of the original VA notification of disability rating and documentation of the veteran's service retirement income, or

indications on the Certificate of Eligibility (COE) that the borrower is entitled as an unmarried surviving spouse.

Consult VA if the borrower's status is unclear after reviewing the appropriate documents

Minimum Credit Score

Purchase/ Rate and Term/ IRRRL 500 min credit score Purchase/IRRRL > $1 mil $1.5 mil min score 700 Cash-out 500 min credit score Cash-out > $700k $1 mil min score 660 Cash-out > $1 mil $1.5 mil min score 700 Credit scores for all transactions with FICOs < 600 require AUS Approval. No Manual

Underwrites.

Minimum Loan Amount Borrower Eligibility

$50,000

Must be a veteran who served the minimum duty with other than a dishonorable discharge Active duty with at least 181 days of duty Un-remarried surviving spouse of eligible veteran (COE) Reservists/National Guard Certificate of Eligibility must have sufficient entitlement to meet minimum 25% guarantee Resident alien permitted as long as primary borrower is a veteran Joint loans involving two unmarried veterans ? veteran borrower plus spouse co-borrower is

not considered a joint loan ? Must be sent to VA for approval

Refinance-Listed Property

Properties currently listed for sale are ineligible for financing Cash-out properties listed for sale within the previous 6 months are ineligible

IRRRL

Last Page

Refinance-Cash Out Properties currently listed for sale are ineligible for financing Permitted when there is greater than 6 months of ownership/title No maximum on dollar amount on cash out ? must be an existing lien against the property

Texas Equity 50 (a) (6) not eligible

Eligible Property Types

Detached/Attached SFR and PUDs, VA Approved Condos ?Link to VA Approved Condo, Factory Built -Modular/Pre-Cut/Panelized Housing covered by the HUD Structural engineering bulletin, and 2-4 Unit properties

Ineligible Property Types

Non-VA Approved Condos, Condotels, Manufactured Housing, Co-op, Mixed-Use, Dome, Straw/Bale, Log, Earth, Working Farms/Ranches, Mobile Homes, Commercial (income producing), VA Indian Leasehold properties, Energy Efficient Loans, Life Estates, and Construction properties

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Special Property Types

Leasehold Estates: Permitted if marketable for area, and lease term require underwriting manager's approval Deed Restrictions: Permitted if marketable for area, and require prior approval by VA IL Land Trust is an institutional corporate entity; individuals are not acceptable. Beneficiary must execute Note and Guarantee Payment of Mortgage Newly completed construction properties (completed less than 1 yr and never owner occupied) follow VA guidelines.

Rural Properties: They are generally acceptable with the following conditions:

Maximum 40 acres. Non-income producing only. The appraisal and comparables must support the land/site-to-value ratio. The appraiser must

determine if the property's land/site-to-value ratio is typical for the area. The land is to be considered residential and not for potential future development.

Recast Option

N/A

Prepayment Penalty N/A Option Conversion option N/A

Terms

Fixed :360 months, 300 months, 240 months, 180 months, and 120 months ARM: 360 months

Amortization

Fully Self amortizing,

Buy down, Temporary Special Features and Specifications

Not Permitted

Construction to Perm post construction financing allowed. (Single close construction loans ineligible.) Revocable Inter-Vivos trust: Permitted on Underwriting management approval HPML: Permitted 30yr only MCCs: Loans with an MCC are permitted and the certificate must be obtained prior to close. CalHFA MCC is not eligible for use.

Escrow Waiver

Not Available ? Escrows Required

Assumability

On arms only. 3/1 arm any time, all other ARMs post fixed rate period Fixed: not permitted

Underwriting Procedure

Run DU or LP For approval No non-traditional credit Tax Deductions ? Use this calculator

Principal Curtailment

A refund is appropriate if an exempt veteran paid a funding fee, or a miscalculation of the fee caused an overpayment. If the veteran was overcharged, the following applies:

A veteran who paid cash for the funding fee received a cash refund for the amount of the overpayment

In the case of a veteran who paid the funding fee out of loan proceeds, the lender must apply the overpayment against the loan balance. Submit evidence to VA that the refund was applied to the loan's principal balance.

Documentation

Full Documentation

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Requirements

Standard VA documents apply Tax Transcripts are required for the number of years of income documented required by AUS

Credit History

Acceptable credit history determined by AUS 0x30 mortgage lates in the recent 12 months

Bankruptcy, Foreclosures, and Deed-in-Lieu must be recognized by the DU AUS system.

Event BK 7 or 11 BK 13

Foreclosure Deed-in-Lieu, Preforeclosure, Short Sale

Waiting Period 2 years On AUS Accept/Approve Permitted with a min of 12 months timely payments on the payout and a court approval to enter into a mortgage transaction 2 years 2 years

Mortgage Insurance No mortgage Insurance is required regardless of LTV on a VA loan.

Subordinate Financing

Permitted for closing costs and/or down payment, but must conform to the above CLTV limitations.

Texas ? Payoff of subordinate financing used for purchase or home improvements or the subordination of a second can be done as long as the first mortgage was not a home equity/cash-out Section 50(a)(6) loan

No negative amortization on the subordinate financing. The repayment terms of the subordinate must provide for regular payments that cover no less than interest due.

The interest rate on the subordinate should be less than the rate on the first Should not restrict the Veteran from selling the property No cash back to borrower

Project Eligibility

Condominium: Must meet VA Criteria.

Co-ops: Not Permitted

Appraisal

Standard Full Appraisal is required All Appraisals must be ordered by the Appraisal order desk ? The standard VA Appraisal is required including interior and exterior of the subject property ? The notice of value is issued by VA and valid for 6 months ? rapidly changing market conditions could dictate the use of a shorter validity period

Qualifying Ratios

Maximum Qualifying Ratio: AUS determination

AUS Refer loans ? 41% AUS Refers will be reviewed and considered on a case by case basis Any allotments reflected on the LES or paystubs must be investigated to determine if the allotment has an affiliate debt In community property states ? the non borrowing spouse's debts and obligations must be considered in qualifying ratios

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